Why Apple and Google Didn’t Make the Dow Cut

Steve Russolillo over at MoneyBeat took note that Apple and Google, two blue-chip tech companies, didn’t gain entry into the Dow club when the industrial average’s owners changed the lineup. (H-P, among others, got the boot.)

It’s likely because their large stock prices would give them a hefty tug on the Dow each day:

Both have long been rumored as names that could join the blue-chip average but haven’t due mainly to their large share prices. The Dow is a price-weighted average, meaning the higher the stock price the bigger the sway on its daily price moves. That’s why moves from a company such as IBM, which sports a stock price just shy of $200, has had such a big weighting on the index’s move.